Monday, September 5, 2011

Public funding of boondoggle bridge coalition gets further scrutiny from State Auditor

Office of State Auditor asks Washington County to explain its $10,000 donation to lobbying group

By Karl Bremer

The Minnesota Office of State Auditor (OSA) examination of
the questionable public financial contributions to the Coalition for the St. Croix River Crossing lobbying group now has expanded to include Washington County.

Stillwater Mayor Ken Harycki

The OSA ruled in August that the $80,000 the City of Stillwater
donated to the Coalition, which Stillwater Mayor Ken Harycki co-chairs, was an
“unauthorized expenditure” and recommended that the City “attempt to recover
the money donated to the Coalition.”

The OSA also recommended that the City of Stillwater
address deficiencies in its contracting procedures with the Coalition and
another pro-bridge consultant it hired this year. And it recommended that
potential conflicts of interests—such as Harycki co-chairing a group the City
gives $80,000 to—should be disclosed even if there is no financial compensation
involved.

The OSA’s ruling was in response to complaints filed by
myself and Stillwater historian Donald
Empson over improper use of taxpayer dollars to promote the proposed $680
million freeway bridge across the St. Croix River. The
City has until September 30 to inform the OSA how it intends to respond to its
recommendations.

According to the St. Paul Pioneer Press, the State Auditor
also has asked WashingtonCounty
to explain its $10,000 donation to the Coalition last May. County administrator
Jim Schug said the county had been asked for information about the donation a
few weeks ago but had not heard back.

The City of Hudson, WI, also donated $5,000 to the Coalition
but it’s not known whether that donation is under investigation by that state’s
auditor.

HARYCKI POINTS FINGER AT CITY ATTORNEY

Meanwhile, Harycki appears to have placed the blame for his
city’s troubles with the State Auditor’s office squarely on City Attorney Dave Magnuson.

“The report was a surprise, because before we had undertaken
this, we went through the city attorney to make sure everything was up to snuff
on this,” Harycki told the Stillwater Gazette.

The OSA chastised the City for its sloppy contracting procedures.

“The City does not have a contract with the Coalition, and
the City’s contract with The Conach Group apparently does not accurately
describe the services provided under the contract,” OSA attorney Nancy Bode wrote in a letter
to Harycki. “If the City decides to contract with the Coalition for services
directly related to one of the City’s authorized functions, the City should use
proper contract management procedures to protect public funds,” the OSA told
Harycki.

The OSA took further issue with the contract between the
City and The Conach Group, with whom the City has contracted for $1,500 a month
for “legislative consulting” services. The OSA noted that “The Conach Group’s
attorney has admitted that the contract between the City and the consultant is ‘poorly
drafted and significantly misrepresents the scope of what The Conach Group did
and is doing for the City.’ The OSA recommended that the City amend its
contract with The Conach Group “to clearly define the roles, responsibilities,
and performance expectations of The Conach Group and City staff.”

Harycki told the Gazette that “This was done with Dave
Magnuson's advice, so right now we have to allow him to take the time to digest
it and look at her letter and determine if it's accurate. Right now, it's in the hands of the city attorney and he'll advise us as
far as what the steps are and we'll go from there. If we have to change it, we
will. In the meantime, this doesn't do anything to diminish our resolve to get
the bridge done.”

Harycki vowed to take the $80,000 out of some other
municipal fund if the State Auditor determines that it’s not appropriate
expenditure for Tax Increment Financing (TIF) funds, where the City
took the money from originally.

“Basically, what we've done is asked our city attorney to reconsider his
opinion that he had given us in light of the report from the state auditor,”
Harycki told the Gazette. “We'll revisit his opinion and one of two things will
happen: he will say he stands by my (his) opinion or upon further review the
state auditor has something there ... If
on further review and reflection the city attorney determines the state auditor
has something, then we would finance it out of another source, probably out of
the general reserves, but there are other sources out there too that would make
up the difference.”

MAYOR AND COUNCIL 'HAVE RUN AMOK'

Empson railed at Harycki and four of the five Stillwater City
Council members who have voted in support of the Coalition donation, the “legislative
consultant” hiring and several other controversial issues.

“The Mayor and four members of the city council (excluding
Ms. Micky Cook) have run amok. I thought we had elected fiscal conservatives
who were dedicated to a transparent government … The $80,000 donation to the
Coalition was disguised on the council agenda as an update to the activities of
the Coalition,” Empson charged. “The city did no due diligence on either the
Coalition or the Conach ‘legislative consultant.’ A legal request for the
Mayor's correspondence with the Coalition—of which he is the co-chair—was met
with a statement from the Mayor saying he had no correspondence or emails
regarding the Coalition.

“Ms. Cook is the only council member who seems to be aware
she is spending public money which requires due process,” Empson concluded.

The OSA agreed.

“In the future, the City should follow Minnesota law and
refrain from making a donation to nonprofit organizations absent specific
stautory or charter authority,” the OSA concluded in its recommendations to Harycki and the City.

8 comments:

It's obvious what's going here, the Conch group is owned by the mayor's campaign advisor and he is represented by the mayor's retained criminal attorney from his last conflict of interest crime as investigated by the Washington County Attorney.

What's so hard to understand? The mayor is again doing exactly what he campaigned against, playing with the good old boys to his advantage and to the detriment of the taxpayers.

This is only the latest of his apparent conflict of interests, what ever happened to the conflict he has with his business client that benefits from city contracts having to do with the docks and other financial arrangements? He claimed that only was .0025% of his business when in fact it is about 10% of his business.

Thanks Karl. I am wondering how to start a historic preservation campaign to save the Buckhorn signs. They are still there - took a docu film crew there this summer and took some photos myself. Land is owned by the Wisdot, where I got permish to access. Any ideas?

That amount could have been donated to far worthier causes like school funding but then again, there are tangible benefits to that as well so I hope the media and the politicians will get into a closure over these brouhaha.

Ripple in Stillwater

Ripple in Stillwater is the sole creation of Stillwater, Minnesota, writer Karl Bremer. It covers whatever captures the author's muse at the moment. You can reach Ripple in Stillwater at saintcroix-at-aol-dot-com, or you can follow me on Twitter @kdbremer. If you're wondering about the name of this blog, go here.

Minnesota Society of Professional Journalists 2011 Page One Award Winner

Ripple in Stillwater author Karl Bremer won Second Place in the Minnesota Society of Professional Journalists 2011 Page One Awards for "Best Use of Public Records."

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